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Lyndon Trott, Chief Minister, Guernsey

IMF publishes positive reports on Guernsey’s high standards


The International Monetary Fund (IMF) has published six evaluation reports which recognise and commend Guernsey’s high standards of financial regulation, supervision and stability along with its robust criminal justice framework.

The IMF’s last evaluation reports on Guernsey were published in November 2003. The IMF was invited to reassess Guernsey’s financial, regulatory and criminal justice structure and that also included examining financial stability elements of the banking and insurance sectors. These evaluations were carried out in March and May 2010.

The resulting reports commend Guernsey as having financial sector regulation and supervision of a high standard across all sectors, and a legal framework which provides a sound basis for an effective AML/CFT regime, with preventive measures being largely in line with the FATF Recommendations.

Guernsey’s Chief Minister, Lyndon Trott said: “The regulatory framework and the Bailiwick’s anti-money laundering (AML) and combating the financing of terrorism (CFT) regime that is now in place has been an important factor in both sustaining Guernsey’s economy and developing and maintaining Guernsey’s international reputation as an excellent place to do business," says Guernsey’s Chief MinisterThis in turn has been an important driver in the continuing development of Guernsey’s international identity.

“Whilst we welcome the positive evaluation reports of the IMF, we will by no means rest on our laurels. Our place in the global financial services economy means we need to remain proactive in evolving our regulatory framework, and ensure that we remain in the vanguard of international standards. Indeed the IMF reports fully recognise that we update our regulatory regime continually.”

The evaluations were part of the IMF’s global Financial Stability Assessment Program. Guernsey was assessed as having a high level of compliance with the international standards against which it was judged – the 25 Basel Core Principles for Effective Banking Supervision; the 28 Insurance Core Principles of the International Association of Insurance Supervisors; and the Financial Action Task Force 40 Recommendations on money laundering and 9 Special Recommendations on terrorist financing. The financial stability of the finance sector was also assessed by evaluation of the vulnerabilities of the banking and insurance industries by stress tests.

Nik van Leuven, Director General of the Guernsey Financial Services Commission, said: “We are pleased with the IMF’s ratings of our framework and its conclusions on the quality of our supervision. Guernsey, like Jersey and the Isle of Man, has emerged well from the IMF’s evaluations of our financial supervision and criminal justice frameworks. It is apparent that Guernsey’s finance sector is robust. The quality of the standards which apply to supervised firms in Guernsey, the effectiveness of our supervision and the reality of what firms do in practice reflect the importance and commitment the Bailiwick attaches to effective supervision, and deterring economic criminals, money launderers and terrorist financiers.”

Guernsey’s contribution to maintaining and promoting international financial stability and to combating and preventing financial crime has been substantiated by a number of international reviews, reports and assessments over the last 10 years. In addition to the IMF’s assessments, this includes those of the UK Government (through both the Edwards Report and the Foot Review); and scrutiny by international bodies including the Financial Action Task Force (FATF); the Financial Stability Forum (FSF); and the Organisation for Economic Co-operation and Development (OECD).

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